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Research on Risks of Letter of Credit Settlement Based on Factor Analysis and System Dynamics Simulation

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posted on 09.09.2019 by cheng zhang

Targeting at the problems in the risk assessment and control processes of the letter of credit settlement in China's export enterprises so far, it first adopts the quantitative method and exploratory factor analysis to extract the main factors. On the basis, the software VENSIM is used to design the dynamics causes tree and the flow chart of the letter of credit system. Next, the equation sets of DANAMO parameters are also constructed with the software. Finally, through observation of the system risk fluctuation diagram with system simulation, it gives enterprises some advice on how to identify risk points and how to prevent and control letter of credit risks in advance.

Funding

Yangtze Normal University Research Fund (NO:20170037)

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Declaration of conflicts of interest

No conflicts of interest to declare.

Corresponding author email

1125064348@qq.com

Lead author country

China

Lead author job role

Career College Faculty

Lead author institution

Yangtze Normal University

Human Participants

Yes

Ethics statement

This study was approved by the management school of Hubei University of arts and science Ethics Committee (ethical approved code. 201612). IBR names: Yanyang Zhu (Dean),Chao Xu (Secretary),Xiaozhou Sun (Vice Dean), and Xiaocui Li (Vice Dean).

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